6 signs the US economy is nowhere near recession

Tim DeWitt carries a US flag during a parade honoring Alek Skarlatos, Spencer Stone and Anthony Sadler (not pictured), who helped thwart an attack on a French train last August. Max Whittaker/Reuters Maybe the US economy is not doomed to slide into a recession.

Long-term rates are higher than short-term rates. Recessions usually happen when that relationship reverses.

BMO Capital Markets

"Every single post-war US recession has been preceded by a significant narrowing or inverted yield curve," wrote Belski. "Similarly, all non-recession bear markets have witnessed similar yield curve patterns. Yet, the slope of the yield curve remains very steep and has actually gotten steeper in recent months."

"We rely heavily on ISM trends in our work given the indicator's relationship with stock market performance," said Belski. "And while ISM trends have certainly cooled down over the past 12 months, levels have remained within expansion territory (i.e., 50+) for over three years. In fact, we have found that ISM levels need to fall well below a 50 reading before the onset of a recession is confirmed."

3/

Consumer confidence is still on the up-and-up.

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"Confidence has always played a critical role in the health and stability of economic and financial market growth," wrote Belski. "That is why we find it encouraging that confidence levels have continued to improve all throughout this bull market with current levels now sitting above historical averages."

4/

Claims for unemployment insurance are at their lowest in 15 years.

BMO Capital Markets

"The debate regarding labor market conditions rages on," said Belski. "But one of the most important leading labor market indicators — jobless claims — continues to improve and currently stands at the lowest level in 15 years. Jobless claims have spiked leading into all post war US recessions. "

5/

Homebuilders are the most optimistic since 2005.

BMO Capital Markets

"Housing has always played a critical role for US economic growth and that is why it is so reassuring that homebuilders are the most optimistic since 2005 (i.e., well before the onset of the financial crisis)," wrote Belski. "More important, every recession since the creation of this series was preceded by deterioration in homebuilder sentiment."

6/

Sales of big-ticket items, most importantly auto sales, are still rising.

BMO Capital Markets

"Big ticket purchases on things such as automobiles are another area of the economy we monitor to get a sense of economic strength," wrote Belski. "Consumers typically pull back on these purchases when economic conditions are deteriorating. Yet, recent data has shown sharp improvement with current auto sales at their highest level in over a decade."